Special Ed Funding – PDE’s Formula Under Attack

A Pennsylvania federal judge has permitted a lawsuit to continue against the Pennsylvania Department of Education (PDE) concerning statewide special education funding. In CG v. Commonwealth of Pennsylvania, parents in the Lancaster and Lebanon School Districts filed suit, alleging that the formula for determining special education funding makes it impossible for Districts to provide a free, appropriate public education (FAPE) and violates numerous laws, including IDEA, the Rehabilitation Act and the Due Process Clause of the Fourteenth Amendment. The parents claim that (1) the formula requires PDE to allocate funds based on average daily membership rather than actual expenditures required to provide FAPE, (2) the inequities in funding are worsened by the School Code’s hold harmless provision, which guarantees that the amount of funding provided to a District will not decrease in subsequent years (even if the needs decrease), and (3) the ability of school districts to place disabled students in approved private schools deepens the funding inequities by allowing districts to separately account for the tuition subsidies instead of using designated special education funds. Finally, the parents raised an issue of specific interest in the Lancaster and Reading Districts involving the cost of bilingual special education.

In response to the parents’ lawsuit, PDE filed a Motion to Dismiss. District Judge Yvette Kane denied the Motion and permitted the complaint to proceed. Judge Kane found that the injuries could be causally connected to the School Code funding provisions which could be redressed by a decision changing the funding formula. The Judge found that there was a substantial probability that the students at issue would receive FAPE if special education funding were more equitably distributed. PDE argued that it was speculative that an alteration in the formula to increase special education funds to the Reading and Lancaster School Districts would improve the FAPE provided to those students, but Judge Kane cited a Congressional finding embedded in IDEA that many students did not have their educational needs met because there was a lack of adequate resources available within the public school system. Judge Kane also found that plaintiffs had advanced a valid claim, on its face. The state’s funding formula could give rise to claims under the Fourteenth Amendment, Section 504 of the Rehabilitation Act and the Equal Educational Opportunities Act. Plaintiffs had sufficiently alleged that they had been denied educational opportunities by reason of their disability.

This decision is not a final decision on the merits. Rather, it only indicates that the case will not be dismissed at the earliest stages. However, we will monitor this case because of its potential impact on the state’s funding formula and may lead to changes in the School Code and the state budgeting process. As of this time, the case is still proceeding in District Court, and as of March 2009, discovery was continuing.

We will continue to update the status of this litigation in future editions of this newsletter.